The construction industry is undergoing a major transformation as it rapidly adopts electric alternatives in response to higher pollution standards and rising fuel prices. According to industry experts, by 2025, most heavy equipment is expected to switch from diesel to electric or hybrid engines. This trend is expected to intensify in the coming years, driven by international regulatory pressures, the growth of suppliers and services that meet the growing demand for electrical construction equipmentand advances in technology that provide original equipment manufacturers (OEMs) with viable options.
Strict pollution rules driving change
Governments and regulatory organizations around the world are implementing tighter pollution restrictions for off-road diesel engines. The introduction of initiatives such as the European (EU) Phase V Emissions Regulation and the China VI Emission Standard exemplify international efforts to reduce exhaust emissions from non-road mobile machinery. In addition, many governments are establishing low noise standards, especially in residential areas and at the municipal level, in addition to emission regulations.
Increase in fuel costs and operating expenses
The cost of diesel and ongoing operating expenses have driven the shift to electric construction equipment. As fuel prices remain high, construction companies are finding it increasingly difficult to use diesel-powered equipment. Electric alternatives, with their reduced energy consumption and lower operating costs, offer a more practical and economical solution for OEMs looking for cost reduction measures while maintaining competitiveness.
Advances in technology and profitability
The construction equipment market is witnessing a trend towards electrification driven by increasing supply and demand as well as technological advances. Electric construction equipment offers clear advantages, and as the technology becomes more widespread, it becomes a more attractive option for construction companies. The profitability of electrification, along with rising fuel prices and the high costs associated with diesel-powered equipment, further strengthens the viability of electric alternatives.
Evolving supplier landscape
As the construction industry embraces electrified equipment, the suppliers and distributors serving this sector are expanding and evolving. Companies are developing and manufacturing a wider range of components and software to meet the growing demand for electrical construction equipment and environmentally friendly solutions. This change also poses challenges for manufacturers of conventional internal combustion engine (ICE) parts, which face disruption as electric vehicles become more prevalent on the market.
Adaptation of the concessionaires’ operating models
Distributors operating in the construction industry must adapt their product and service offerings to accommodate electrical construction equipment (ECE). ECE has fewer parts and requires different maintenance compared to ICE equipment. Dealers will be required to provide services such as battery support, vehicle charging and other specialized maintenance requirements associated with electric alternatives.
The electrification of construction equipment represents a sustainable change in the industry, driven by factors such as strict pollution regulations, rising fuel costs and the profitability of electric alternatives. As governments around the world enforce pollution regulations and encourage the adoption of clean energy, the trend toward battery-powered construction equipment is expected to intensify. This transition entails changes in the landscape of suppliers and operating models of distributors, encouraging the development of environmentally friendly and economically viable solutions for the construction sector.
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